<PAGE> 1
NEWPORT TIGER CUB FUND CLASS A, B, C AND Z SHARES
SEMIANNUAL REPORT, FEBRUARY 29, 2000
STEIN ROE SMALL CAP ASIAN TIGER FUND
ADVISED BY NEWPORT FUND MANAGEMENT, INC.
<PAGE> 2
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
We are pleased to present the semiannual report for the six-month period ended
February 29, 2000. As of January 1, 2000, Newport Tiger Cub Fund changed its
name to Stein Roe Small Cap Asian Tiger Fund and, pending Trustee approval, will
again change its name on May 1, 2000, to Stein Roe Small Cap Tiger Fund. Newport
Fund Management serves as the Advisor and will continue to offer strong local
relationships, specialized knowledge and the expertise to pursue what they
believe are the best opportunities within specific markets.
The emerging stock markets of Asia were strong throughout the period, which we
believe is evidence that the region's comeback is footed in fundamental change
as well as renewed real growth. Patient Asian investors have been rewarded by
keeping their long-term perspectives through earlier, volatile times.
The Fund had excellent performance over the past year compared to its benchmark,
Morgan Stanley Capital International (MSCI) Pacific ex-Japan Index(1).
Shareholders have benefited from the favorable environment but also from the
seasoned investment talents of the Fund's Advisor, Newport Fund Management, who
has established itself as a leader in Asian and Pacific markets over the past 20
years.
The following report provides more specifics about the Fund's performance and
the strategies that contributed to its strong performance for the period. As
always, we thank you for the opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
April 11, 2000
(1) See benchmark index chart on page 1 for performance results.
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
<PAGE> 3
HIGHLIGHTS
- TECHNOLOGY SECTOR SOARED
The outstanding recent performance of U.S. technology companies has been
matched, if not surpassed, by their Asian counterparts. The Asian PC and
wireless markets were especially strong during the past year.
- HONG KONG WAS STRONG
Shares of Hong Kong companies staged a dramatic run-up in the past six
months, as investors appreciated the unique advantages of this gateway to
Greater China.
- SOUTHEAST ASIA CONTINUED TO LAG
Capital steadily moved out of Indonesia and the Philippines, a continuation
of prior trends. These island regions were joined by Thailand as Asia's
weakest performers during the period.
- THE FUND MADE A STRONG SHOWING IN ITS CATEGORY
Superior stock selection and geographic positioning helped the Fund's Class
A shares to outperform the benchmark index for its region by a significant
margin.
NEWPORT TIGER CUB FUND CLASS A PERFORMANCE
VS. MSCI PACIFIC EX-JAPAN INDEX
9/1/99 - 2/29/00
[Bar Chart]
<TABLE>
<S> <C>
Newport Tiger Cub
Fund Class A shares
without sales charge ................. 23.54%
MSCI Pacific
Ex-Japan Index ....................... 8.30%
</TABLE>
NET ASSET VALUE PER SHARE
ON 2/29/00 VS. 8/31/99
<TABLE>
<S> <C> <C>
Class A $ 9.97 $8.07
- ------------------------------
Class B $ 9.68 $7.87
- ------------------------------
Class C $ 9.71 $7.89
- ------------------------------
Class Z $10.01 $8.10
- ------------------------------
</TABLE>
Past performance cannot guarantee future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. Performance results
assume reinvestment of distributions.
MSCI Pacific Region (Ex-Japan) Index is a broad-based, unmanaged index that
tracks the performance of stocks in the Pacific Rim in countries other than
Japan. Unlike mutual funds, indexes are not investments and do not incur fees or
expenses. It is not possible to invest in an index.
1
<PAGE> 4
PORTFOLIO MANAGER'S REPORT
TOP FIVE SECTOR BREAKDOWNS
2/29/00 VS. 8/31/99
[Bar Chart]
<TABLE>
<CAPTION>
2/29/00 8/31/99
- -------------------------------------------------------------------------------
<S> <C> <C>
Consumer/Retail 22.84% 32.89%
- -------------------------------------------------------------------------------
Mfg/Export 22.64% 21.09%
- -------------------------------------------------------------------------------
Tech 15.00% 5.1%
- -------------------------------------------------------------------------------
Wholesale Trade 7.08% 6.70%
- -------------------------------------------------------------------------------
Real Estate 6.66% 8.19%
- -------------------------------------------------------------------------------
</TABLE>
Sector breakdowns are calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain the same sector breakdown in the future.
BOUGHT
- -------------------------------------------------------------------------------
LOCUS CORP. (3.3% OF NET ASSETS), based in Korea, specializes in the
reprogramming of old telecom switching technology, converging telephony with
Internet access. The company's low debt/equity ratio and attention to
shareholder value make it especially attractive.
WYSE TECHNOLOGY TAIWAN LTD. (2.5% OF NET ASSETS), located in Taiwan, produces
"thin client terminals," which connect to a server. These terminals are
increasingly popular among business customers, because they provide a full range
of telecommunications services without a bulky central processing unit.
FUND OUTPERFORMED FOR THE PERIOD
The Fund's Class A shares had a total return of 23.54%, without a sales charge,
for the past six months. This performance exceeded the 8.30% return of the MSCI
Pacific ex-Japan Index. The Fund's strong showing relative to this benchmark is
an indication of solid stock selection.
WE BROADENED THE SCOPE OF THE PORTFOLIO
During the past six months, the number of portfolio holdings rose from 30
companies to 36. This expansion reflects the increased number of investment
opportunities in countries with attractive macroeconomic outlooks.
Separately, in response to the changing market definition of small
capitalization, we expanded the Fund's definition of small capitalization
companies. We can now purchase companies with a market capitalization of $1
billion to no greater than $2 billion. This expanded definition of what
constitutes a "small capitalization" company is a better fit with today's
standards for initial public offerings.
WINNING WITH TECHNOLOGY THROUGH DISCIPLINE
Not only has the portfolio benefited greatly from the sharp spike in valuations
among technology companies, but gains have been achieved without investing in
companies that lack a proven revenue stream. Such companies may find temporary
favor in the market, but they are not suitable for a fund with a long-term
growth orientation.
Of particular interest when we select stocks for the Fund's portfolio are
established companies that have redefined themselves in accordance with changing
technology markets. Shanghai-based TCL (1.8% of net assets), a recent addition
to the Fund, is moving from TVs, where market penetration is high in China, to
the faster growing market of set-top boxes, which enable households with TVs to
hook up to the Internet. The Fund has also purchased shares in Computer &
Technologies (5.4% of net assets), another Chinese company. A systems
integration company established in 1991, Computer & Technology assisted in the
merger of the Ministry of Post & Telecommunications with the Ministry of
Electronics to form China's new Ministry of Information Industry. Now, the
company is assisting the Hong Kong government in promoting Hong Kong as the
leading 'Digital City' in the region by constructing its business-to-business
platform.
2
<PAGE> 5
PORTFOLIO MANAGER'S REPORT (CONTINUED)
GEOPOLITICAL ADJUSTMENTS
Shareholders should be aware that there are sharp differences in the
macroeconomic climates offered by the various countries within the investment
universe of the Fund. In accordance with these differences, we have been
steadily reducing our exposure to Indonesia and the Philippines, to the point
where each now represents less than 4% of the total portfolio. These two
countries are under protection from the International Monetary Fund (IMF), whose
support aided other countries in recovering from the region-wide crisis that
began in 1997.
On a more optimistic note, the Fund has been actively pursuing new investments
in Korea and Taiwan. In years past, investment in these countries fell outside
of Newport's focus because most stocks were cyclical and often in debt-laden
industries, notably petrochemical, steel and microchip production. However, in
addition to the fact that liquidity of both markets has increased greatly as
foreign ownership limitations have been raised, the makeup of the markets has
expanded to embrace the "New Economy."
AN EXPANSIVE OUTLOOK
As the Fund takes advantage of the New Economy throughout Asia, demographics
should play an important role in the Advisor's portfolio decisions. In China,
the government is helping to fund the economic growth. China will soon release
its e-commerce development strategy, which includes $10 billion to build the
Internet infrastructure for its 1.2 billion people. Another area of increasing
interest is Asia's other population center -- India. The modernization of India
is a long-term process in which we intend to participate, with our traditional
selectivity. Regional opportunities such as these may position the Fund in a
favorable stance.
SIG TO COME
LYNDA COUCH is portfolio manager of the Fund and is a managing director of
Newport Fund Management.
International investing offers significant long-term growth potential, but also
involves certain risks. Because many of the Tiger countries are considered
emerging markets, they are subject to a greater degree of social, political,
currency and economic instability. Small cap stocks involve certain risks, such
as lower liquidity, that are not present in stocks of larger, more established
companies.
<TABLE>
<CAPTION>
TOP 10 HOLDINGS AS OF 2/29/00
<S> <C>
Datacraft Asia Ltd. 7.8%
- ----------------------------------------
Li & Fung Ltd. 7.1%
- ----------------------------------------
China Telecom Ltd. 6.3%
- ----------------------------------------
Johnson Electric Holdings Ltd 5.9%
- ----------------------------------------
Computer &
Technologies Holdings Ltd. 5.4%
- ----------------------------------------
Venture Mfg Singapore Ltd. 5.1%
- ----------------------------------------
Avimo Singapore Ltd. 4.6%
- ----------------------------------------
Dickson Concepts International Ltd 3.7%
- ----------------------------------------
Locus Corp. 3.3%
- ----------------------------------------
Thai Union
Frozen Products Public Co. 3.2%
- ----------------------------------------
</TABLE>
Holdings are calculated as a percentage of net assets. Because the Fund is
actively managed, there can be no guarantee the Fund will continue to hold these
securities in the future.
SOLD
- -------------------------------------------------------------------------------
SM PRIME HOLDINGS, based in the Philippines, was sold from the portfolio in
early 2000. This decision was based on a new law giving foreigners the right to
own more than 49% of retail operations in the Philippines. SM Prime Holdings, a
builder and developer of shopping malls, will face more competition as a result
of this law.
3
<PAGE> 6
PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURNS AS OF 2/29/00
<TABLE>
<CAPTION>
Share Class A B C Z
Inception 6/3/96 6/3/96 6/3/96 6/3/96
- -----------------------------------------------------------------------------------------------------
w/o with w/o with w/o with w/o with
sales sales sales sales sales sales sales sales
charge charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six-month 23.54 16.44 23.00 18.00 23.07 22.07 23.58 --
- -----------------------------------------------------------------------------------------------------
1 year 83.27 72.73 81.95 76.95 81.84 80.84 83.67 --
- -----------------------------------------------------------------------------------------------------
3 years 1.02 (0.96) 0.17 (0.83) 0.24 0.24 1.18 --
- -----------------------------------------------------------------------------------------------------
Life of fund (0.06) (1.63) (0.86) (1.67) (0.78) (0.78) 0.13 --
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/99
Share Class A B C Z
- -----------------------------------------------------------------------------------------------------
w/o with w/o with w/o with w/o with
sales sales sales sales sales sales sales sales
charge charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six-month 17.18 10.44 16.61 11.61 16.69 15.69 17.23 --
- -----------------------------------------------------------------------------------------------------
1 year 68.81 59.11 67.65 62.65 67.59 66.59 69.20 --
- -----------------------------------------------------------------------------------------------------
3 years 1.12 (0.85) 0.28 (0.73) 0.38 0.38 1.29 --
- -----------------------------------------------------------------------------------------------------
Life of fund (0.09) (1.73) (0.88) (1.72) (0.79) (0.79) 0.11 --
- -----------------------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the maximum contingent deferred
sales charge of 5% for one year and 3% for the three year and life of Fund for
Class B shares and 1% for one year for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes will vary based on differences in sales charges and fees
associated with each class.
4
<PAGE> 7
INVESTMENT PORTFOLIO
February 29, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
COMMON STOCKS - 94.4% COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSTRUCTION - 0.8%
SPECIAL TRADE CONTRACTORS
Zhejiang Expressway Co., Ltd., Class B HK 1,000 $125
----
- ---------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 17.5%
DEPOSITORY INSTITUTIONS -4.7%
Hang Seng Bank Ltd. HK 25 226
Oversea-Chinese Banking Corp., Ltd. Si 74 465
-----
691
-----
HOLDING COMPANIES - 3.7%
Dickson Concepts International Ltd. HK 500 546
-----
INSURANCE CARRIERS - 1.3%
Thai Reinsurance Co., Ltd. Th 240 192
-----
REAL ESTATE - 7.8%
Cheung Kong Holdings Ltd. HK 25 332
City Developments Ltd. Si 54 219
HKR International Ltd. HK 349 172
SM Prime Holdings, Inc. Ph 1,233 165
Sun Hung Kai Properties Ltd. HK 29 262
-----
1,150
-----
- ---------------------------------------------------------------------------------
MANUFACTURING - 30.0%
ELECTRONIC COMPONENTS - 1.8%
TCL International Holdings Ltd. (a) HK 500 263
-----
FOOD & KINDRED PRODUCTS - 6.0%
Four Seas Mercantile Holdings Ltd. HK 1,754 415
Thai Union Frozen Products Public Co. --
Foreign Shares Th 160 478
-----
893
-----
HOUSEHOLD APPLIANCES - 1.2%
Guangdong Kelon Electric Holdings,
Class H HK 379 185
-----
MEASURING & ANALYZING INSTRUMENTS - 14.4%
Avimo Singapore Ltd. Si 380 674
China Hong Kong Photo Products
Holdings Ltd. HK 2,898 339
PT Modern Photo Film -- Foreign Shares In 1,293 365
Venture Manufacturing Singapore Ltd. Si 50 751
-----
2,129
-----
NONMETALLIC, EXCEPT FUELS - 1.4%
Eastern Water Resources Development &
Management Ltd. -- Foreign Shares Th 332 207
-----
RUBBER & PLASTIC - 1.4%
PT Dynaplast -- Foreign Shares In 1,398 211
-----
STONE, CLAY, GLASS & CONCRETE - 2.5%
WYSE Technology Taiwan Ltd. Tw 139 367
-----
</TABLE>
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
TEXTILE MILL PRODUCTS - 1.3%
China Fangda Group Co., Ltd., Class B Ch 500 $194
----
- ----------------------------------------------------------------------------------
RETAIL TRADE -8.1%
APPAREL & ACCESSORY STORES - 5.0%
Esprit Holdings Ltd. HK 278 266
Giordano International Ltd. HK 200 224
Glorious Sun Enterprises HK 900 243
------
733
------
MISCELLANEOUS RETAIL - 2.0%
Sa Sa International Holdings Ltd. HK 1,500 289
------
RESTAURANTS - 1.1%
Cafe de Coral Holdings Ltd. HK 500 164
------
- ----------------------------------------------------------------------------------
SERVICES - 13.2%
COMPUTER RELATED SERVICES
Computer & Technologies
Holdings Ltd. (a) HK 270 800
Datacraft Asia Ltd. Si 137 1,158
------
1,958
------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES - 11.9%
AIR TRANSPORTATION - 0.6%
Beijing Capital International Airport (a) HK 400 82
------
GAS SERVICES - 1.7%
Hong Kong & China Gas Co., Ltd. HK 209 244
------
TELECOMMUNICATIONS - 9.6%
China Telecom Ltd. (a)(b) HK 100 930
Locus Corp. (a) SK 2 487
------
1,417
------
- ----------------------------------------------------------------------------------
WHOLESALE TRADE - 12.9%
DURABLE GOODS
Johnson Electric Holdings Ltd. HK 132 868
Li & Fung Ltd. HK 269 1,047
------
1,915
------
TOTAL COMMON STOCKS
(cost of $11,233)(c) 13,955
------
WARRANTS (a) - 1.2%
- ---------------------------------------------------------------------------------
RETAIL TRADE - 1.2%
RESTAURANTS
Jollibee Foods Corp.(cost of $295) Ph 650 178
------
TOTAL INVESTMENTS - 95.6%
(cost of $11,528)(c) 14,133
------
</TABLE>
5
<PAGE> 8
INVESTMENT PORTFOLIO (CONTINUED)
February 29, 2000 (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS - 15.5% PAR VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
Repurchase agreement with
SBC Warburg Ltd., dated 02/29/00,
due 03/01/00 at 5.770%, collateralized
by U.S. Treasury bonds and/or notes
with various maturities to 2021,
market value $1,036
(repurchase proceeds $1,152) $1,152 $1,152
Student Loan Marketing Association,
5.720% 03/01/00(d) 1,152 1,152
------
TOTAL SHORT-TERM OBLIGATIONS 2,304
------
OTHER ASSETS & LIABILITIES, NET - (11.1)% (1,648)
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $14,789
------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- -------------------------------------------------------------------------------
(a) Non-income producing.
(b) The value of this security represents fair value as determined in good
faith under the direction of the Trustees.
(c) Cost for federal income tax purposes is the same.
(d) Rate represents yield at day of purchase.
<TABLE>
<CAPTION>
SUMMARY OF
SECURITIES BY COUNTRY COUNTRY VALUE % OF TOTAL
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong HK $8,022 65.0
Singapore Si 3,267 14.9
Thailand Th 877 6.2
Philippines Ph 343 2.4
Indonesia In 576 4.1
Taiwan Tw 367 2.6
China Ch 194 1.4
South Korea SK 487 3.4
------- -----
$14,133 100.0
------- -----
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
See notes to financial statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
(In thousands except for per share amounts and footnotes)
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments at value (cost $11,528) $ 14,133
Short-term obligations 2,304
------
16,437
Cash including foreign
currencies (cost $65) $ 66
Receivable for:
Investments sold 90
Expense reimbursement due from
Advisor/Administrator 36
Fund shares sold 6
Other 55 253
-- ---
Total Assets 16,690
LIABILITIES
Payable due to custodian bank 1,151
Cash including foreign
currencies (cost $50) 50
Payable for:
Investments purchased 484
Fund shares repurchased 77
Accrued:
Management fee 15
Administration fee 3
Transfer agent fee 3
Bookkeeping fee 4
Deferred Trustees fee 1
Other 113
---
Total Liabilities 1,901
-----
NET ASSETS $ 14,789
========
Net asset value & redemption price per share --
Class A ($5,659/568) $ 9.97(a)
========
Maximum offering price per share --
Class A ($9.97/0.9425) $ 10.58(b)
========
Net asset value & offering price per share --
Class B ($8,047/831) $ 9.68(a)
========
Net asset value & offering price per share --
Class C ($1,036/107) $ 9.71(a)
========
Net asset value, offering & redemption price
per share -- Class Z ($47/5) $ 10.01
========
COMPOSITION OF NET ASSETS
Capital paid in $ 16,165
Accumulated net investment loss (71)
Accumulated net realized loss (3,910)
Net unrealized appreciation 2,605
-----
$ 14,789
========
</TABLE>
(a)Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b)On sales of $50,000 or more the offering price is reduced.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Six Months Ended February 29, 2000 (Unaudited)
(In thousands)
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 141
Interest 16
--
Total Investment Income
(net of nonreclaimable foreign taxes
withheld at source amounted to $2) 157
EXPENSES
Management fee $ 80
Administration fee 17
Service fee -- Class A, Class B, Class C 17
Distribution fee -- Class B 29
Distribution fee -- Class C 4
Transfer agent fee 25
Bookkeeping fee 14
Trustees fee 4
Legal fee 3
Custodian fee 12
Audit fee 11
Registration fee 19
Reports to shareholders 4
Other 8
--
247
Fees and expenses waived
by the Advisor/Administrator (58) 189
--- ---
Net Investment Loss (32)
---
NET REALIZED & UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized gain on:
Investments 1,520
Foreign currency transactions 7
-----
Net Realized Gain 1,527
Net change in unrealized appreciation
depreciation during the period on:
Investments 1,434
Foreign currency transactions (2)
--
Net Change in Unrealized
Appreciation/Depreciation 1,432
-----
Net Gain 2,959
-----
Increase In Net Assets From Operations $ 2,927
=======
</TABLE>
See notes to financial statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29 AUGUST 31
---------- ---------
INCREASE (DECREASE) IN NET ASSETS 2000 1999
- ------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) $ (32) $ 43
Net realized gain (loss) 1,527 (445)
Net change in unrealized appreciation/
depreciation 1,432 7,635
------ ------
Net Increase from Operations 2,927 7,233
------ ------
Distributions:
From net investment income -- Class A -- (4)
From net investment income -- Class Z -- (a)
------ ------
-- 7,229
------ ------
Fund Share Transactions:
Receipts for shares sold -- Class A 2,224 4,205
Value of distributions reinvested -- Class A -- 4
Cost of shares repurchased -- Class A (2,547) (5,991)
------ ------
(323) (1,782)
---- ------
Receipts for shares sold -- Class B 530 2,883
Cost of shares repurchased --Class B (1,178)
------
(648) 579
------ ------
Receipts for shares sold -- Class C 74 470
Cost of shares repurchased -- Class C (194) (1,007)
------ ------
(120) (537)
------ ------
Receipts for shares sold -- Class Z -- 5
Value of distributions reinvested -- Class Z -- (a)
Cost of shares repurchased -- Class Z (2) (15)
------ ------
(2) (10)
------ ------
Net Decrease from Fund
Share Transactions (1,093) (1,750)
------ ------
Total Increase 1,834 5,479
NET ASSETS
Beginning of period 12,955 7,476
------ ------
End of period (including accumulated
net investment loss of $71 and
overdistributed net investment income
of $39, respectively) $14,789 $12,955
======= =======
</TABLE>
(a) Rounds to less than one.
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29 AUGUST 31
----------- ----------
NUMBER OF FUND SHARES 2000 1999
- ------------------------------------------------------------------------------------
<S> <C> <C>
Sold -- Class A 270 594
Issued for distributions reinvested -- Class A -- 1
Repurchased -- Class A (303) (906)
---- ----
(33) (311)
---- ----
Sold -- Class B 62 462
Repurchased -- Class B (135) (384)
---- ----
(73) 78
---- ----
Sold -- Class C 9 84
Repurchased -- Class C (23) (154)
(14) (70)
---- ----
Sold -- Class Z -- 1
Issued for distributions reinvested -- Class Z -- (a)
Repurchased -- Class Z -- (2)
---- ----
-- (1)
---- ----
</TABLE>
See notes to financial statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
February 29, 2000 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Stein Roe Small Cap Asian Tiger Fund (formerly
Newport Tiger Cub Fund) (the Fund), a series of Liberty Funds Trust II, the
accompanying financial statements contain all normal and recurring adjustments
necessary for the fair presentation of the financial position of the Fund at
February 29, 2000, and the results of its operations, the changes in its net
assets and the financial highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION:
The Fund is a diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek
capital appreciation by investing primarily in equity securities of small
companies (i.e. companies with equity market capitalizations of U.S. $2 billion
or less) located in the nine Tiger markets of Asia (Hong Kong, Singapore, South
Korea, Taiwan, Malaysia, Thailand, Indonesia, The People's Republic of China and
the Philippines). The Fund may issue an unlimited number of shares. The Fund
offers four classes of shares: Class A, Class B, Class C and Class Z. Class A
shares are sold with a front-end sales charge. A 1.00% contingent deferred sales
charge is assessed on redemptions made within eighteen months on an original
purchase of $1 million to $5 million. Class B shares are subject to an annual
distribution fee and a contingent deferred sales charge effective February 1,
2000.
Class B shares will convert to Class A shares as follows:
<TABLE>
<CAPTION>
ORIGINAL PURCHASE --------------------------
----------------- CONVERTS TO CLASS A SHARES
<S> <C>
Less than $250,000 8 years
$250,000 to less than $500,000 4 years
$500,000 to less than $1,000,000 3 years
</TABLE>
Class C shares are subject to a contingent deferred sales charge on redemptions
made within one year after purchase and an annual distribution fee. Class Z
shares are offered continuously at net asset value. There are certain
restrictions on the purchase of Class Z shares, as described in the Fund's
prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies that are consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Equity securities generally are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices. In certain countries, the Fund may hold foreign
designated shares. If the foreign share prices are not readily available as a
result of limited share activity, the securities are valued at the last sale
price of the local shares in the principal market in which such securities are
normally traded. Korean equity securities that have reached the limit for
aggregate foreign ownership and for which premiums to the local exchange prices
may be paid by foreign investors are valued by applying a broker quoted premium
to the local share price. In addition, if the values of foreign securities have
been materially affected by events occurring after the closing of the market,
the foreign securities may be valued at their fair value under procedures
approved by the Trustees.
Forward currency contracts are valued based on the weighted value of the
contracts with similar maturities.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies is
translated into U.S. dollars at that day's exchange rates. In certain countries,
the Fund may hold portfolio positions for which market quotations are not
readily available. Such securities are valued at fair value under procedures
approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than the Class A, Class B and Class C service fees
and Class B and Class C distribution fees), realized and unrealized gains
(losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B and
Class C shares and the distribution fee applicable to Class B and Class C shares
only.
Class A, Class B and Class C ratios are calculated by adjusting the expense and
net investment income ratios for the Fund for the entire period by the service
fee applicable to Class A, Class B and Class C shares and the distribution fee
applicable to Class B and Class C shares only.
FEDERAL INCOME TAXES:
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable income, no federal income tax has been
accrued.
DEFERRED ORGANIZATION EXPENSES:
The Fund incurred $1,000 of expenses in connection with its organization. These
expenses were deferred and are being amortized on a straight-line basis over
five years.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 29, 2000 (Unaudited)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS:
Net realized and unrealized gains (losses) on foreign currency transactions
includes the gains (losses) arising from the fluctuations in exchange rates
between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) from investments.
FORWARD CURRENCY CONTRACTS:
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities. The Fund may also enter into forward currency
contracts to hedge certain other foreign currency denominated assets. The
contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency contracts
are closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included in net realized and unrealized gains (losses) on
foreign currency transactions. Forward currency contracts do not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the maximum
potential loss from such contracts is the aggregate face value in U.S. dollars
at the time the contract is opened, the actual exposure is typically limited to
the change in value of the contract (in U.S. dollars) over the period it remains
open. Risks may also arise if counterparties fail to perform their obligations
under the contracts.
OTHER:
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware of
such), net of nonrebatable tax withholdings. Where a high level of uncertainty
as to collection exists, income on securities is recorded net of all tax
withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-market
daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Newport Fund Management (the Advisor), is the investment Advisor of the Fund and
receives a monthly fee equal to 1.15% annually of the Fund's average net assets.
ADMINISTRATION FEE:
Colonial Management Associates, Inc. (the Administrator), an affiliate of the
Advisor, provides accounting and other services for a monthly fee equal to 0.25%
of the Fund's average net assets.
BOOKKEEPING FEE:
The Administrator provides bookkeeping and pricing services for a monthly fee
equal to $27,000 annually plus 0.035% annually of the Fund's average net assets
over $50 million.
TRANSFER AGENT:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the
Administrator, provides shareholder services for a monthly fee equal to 0.236%
annually of the Fund's average net assets and receives reimbursement for certain
out of pocket expenses.
Effective January 1, 2000, the Transfer Agent fee was changed to a fee comprised
of 0.07% annually of average net assets plus charges based on the number of
shareholder accounts and transactions.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Administrator, is the Fund's principal underwriter. For the six months ended
February 29, 2000, the Fund has been advised that the Distributor retained net
underwriting discounts of $970 on sales of the Fund's Class A shares and
received contingent deferred sales charges (CDSC) of none, $24,404 and $320 on
Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually on Class A, Class B and Class C net assets
as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.75% of the average net assets
attributable to Class B and Class C shares only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS:
The Advisor/Administrator has agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of
service fees, distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 2.00% annually of the Fund's average net
assets.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 2000 (Unaudited)
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor or Administrator.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the six months ended February 29, 2000, purchases and sales of
investments, other than short-term obligations, were $1,730,897 and $2,243,937
respectively.
Unrealized appreciation (depreciation) at February 29, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $ 5,476,125
Gross unrealized depreciation (2,871,113)
-----------
Net unrealized appreciation $ 2,605,012
==========
</TABLE>
CAPITAL LOSS CARRYFORWARDS:
At August 31, 1999, capital loss carryforwards available (to the extent provided
in regulations) to offset future realized gains were approximately as follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
------------------ -------------------------
<S> <C>
2005 $ 38,000
2006 914,000
2007 4,208,000
----------
$5,160,000
==========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
OTHER:
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or other
foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 5. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended February 29, 2000.
11
<PAGE> 14
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout the period are as
follows:
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED FEBRUARY 29, 2000
----------------------------------
CLASS A CLASS B CLASS C CLASS Z
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.070 $ 7.870 $ 7.890 $ 8.100
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)(b) -- (0.033) (0.033) 0.011
Net realized and unrealized gain 1.900 1.843 1.853 1.899
-------- -------- -------- --------
Total from Investment Operations 1.900 1.810 1.820 1.910
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 9.970 $ 9.680 $ 9.710 $10.010
======== ======== ======== ========
Total return (c)(d)(e) 23.54% 23.00% 23.07% 23.58%
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 2.25% 3.00% 3.00% 2.00%
Net investment income (loss) (f)(g) 0.00% (0.75)% (0.75)% 0.25%
Fees and expenses waived or borne by the Advisor/Administrator (f)(g) 0.83% 0.83% 0.83% 0.83%
Portfolio turnover (e) 13% 13% 13% 13%
Net assets at end of period (000) $ 5,659 $ 8,047 $ 1,036 $ 47
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $ 0.037 $ 0.037 $ 0.037 $ 0.037
</TABLE>
(b) Per share data was calculated using average shares outstanding during
the period.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999
--------------------------
CLASS A CLASS B CLASS C CLASS Z
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 3.900 $ 3.830 $ 3.830 $ 3.920
-------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.051 0.005 0.006 0.067
Net realized and unrealized gain 4.124 4.035 4.054 4.136
-------- -------- -------- -------
Total from Investment Operations 4.175 4.040 4.060 4.203
-------- -------- -------- -------
LESS DISTRIBUTION DECLARED TO SHAREHOLDERS:
From net investment income (0.005) -- -- (0.023)
-------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 8.070 $ 7.870 $ 7.890 $ 8.100
-------- -------- -------- -------
Total return (c)(d) 107.10% 105.48% 106.01% 107.43%
======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.25% 3.00% 3.00% 2.00%
Net investment income (e) 0.84% 0.09% 0.09% 1.09%
Fees and expenses waived or borne by the Advisor/Administrator (e) 1.35% 1.35% 1.35% 1.35%
Portfolio turnover 36% 36% 36% 36%
Net assets at end of period (000) $ 4,847 $ 7,115 $ 954 $ 39
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $ 0.083 $ 0.083 $ 0.083 $ 0.083
</TABLE>
(b) Per share data was calculated using average shares outstanding during
the period.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
12
<PAGE> 15
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout the period are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1998
-----------------------------------------------------
CLASS A CLASS B CLASS C CLASS Z
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.100 $9.020 $9.020 $9.130
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a)(b) 0.115 0.067 0.067 0.132
Net realized and unrealized loss (5.315) (5.257) (5.257) (5.342)
------ ------ ------ ------
Total from Investment Operations (5.200) (5.190) (5.190) (5.210)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $3.900 $3.830 $3.830 $3.920
====== ====== ====== ======
Total return (c)(d) (57.14)% (57.54)% (57.54)% (57.06)%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 2.25% 3.00% 3.00% 2.00%
Net investment income (e) 1.75% 1.00% 1.00% 2.00%
Fees and expenses waived or borne by the Advisor/Administrator (e) 1.02% 1.02% 1.02% 1.02%
Portfolio turnover 56% 56% 56% 56%
Net assets at end of period (000) $ 3,556 $3,165 $ 732 $ 23
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $ 0.067 $ 0.067 $ 0.067 $0.067
</TABLE>
(b) Per share data was calculated using average shares outstanding during
the period.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(d) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1997
--------------------------------------------------
CLASS A CLASS B CLASS C (c) CLASS Z
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.320 $9.300 $9.300 $9.320
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)(b) 0.059 (0.012) (0.012) 0.083
Net realized and unrealized loss (0.279) (0.268) (0.268) (0.273)
------ ------ ------ ------
Total from Investment Operations (0.220) (0.280) (0.280) (0.190)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $9.100 $9.020 $9.020 $9.130
====== ====== ====== ======
Total return (d)(e) (2.36)% (3.01)% (3.01)% (2.04)%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS
Expenses (f) 2.25% 3.00% 3.00% 2.00%
Net investment income (loss) (f) 0.62% (0.13)% (0.13)% 0.87%
Fees and expenses waived or borne by the Advisor/Administrator (f) 1.09% 1.09% 1.09% 1.09%
Portfolio turnover 96% 96% 96% 96%
Net assets at end of period (000) $8,653 $7,664 $1,300 $1,203
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $0.105 $0.105 $0.105 $0.105
</TABLE>
(b) Per share data was calculated using average shares outstanding during
the period.
(c) Effective July 1, 1997, Class D shares were redesignated Class C
shares.
(d) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(e) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
13
<PAGE> 16
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout the period are as
follows:
<TABLE>
<CAPTION>
PERIOD ENDED AUGUST 31, 1996 (c)
------------------------------------------------
CLASS A CLASS B CLASS C CLASS Z
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.000 $10.000 $10.000 $10.000
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (a)(b) 0.016 (0.002) (0.002) 0.021
Net realized and unrealized loss (0.696) (0.698) (0.698) (0.701)
------- ------- ------- -------
Total from Investment Operations (0.680) (0.700) (0.700) (0.6800)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $9.320 $9.300 $9.300 $9.320
====== ====== ====== ======
Total return (d)(e)(f) (6.80)% (7.00)% (7.00)% (6.80)%
====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS
Expenses (g)(h) 2.25% 3.00% 3.00% 2.00%
Net investment income (loss) (g)(h) 0.62% (0.13)% (0.13)% 0.87%
Fees and expenses waived or borne by the Advisor/Administrator (g)(h) 5.16% 5.16% 5.16% 5.16%
Portfolio turnover (f) 3% 3% 3% 3%
Net assets at end of period (000) $3,542 $2,654 $738 $1,166
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $0.123 $0.123 $0.123 $0.123
</TABLE>
(b) Per share data was calculated using average shares outstanding during
the period.
(c) The Fund commenced investment operations on June 3, 1996.
(d) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(e) Had the Advisor/Administrator not waived or reimbursed a portion of
expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(h) Annualized.
14
<PAGE> 17
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left blank.]
<PAGE> 18
[This page intentionally
left blank.]
<PAGE> 19
TRUSTEES & TRANSFER AGENT
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President - Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for the Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of the Fund. This report may also
be used as sales literature when preceded or accompanied by the current
prospectus which provides details of sales charges, investment objectives and
operating policies of the Fund and with the most recent copy of the Liberty
Funds Distributor, Inc. Performance Update.
<PAGE> 20
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
- -------------------------------------------------------------------------------
FUNDS
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COLONIAL FIXED INCOME AND VALUE STYLE EQUITY INVESTING.
CRABBE
HUSON A CONTRARIAN APPROACH TO FIXED INCOME AND EQUITY INVESTING.
NEWPORT A LEADER IN INTERNATIONAL INVESTING.(SM)
STEIN ROE
ADVISOR SOLUTIONS FOR GROWTH AND INCOME INVESTING.
[KEYPORT
LOGO] A LEADING PROVIDER OF INNOVATIVE ANNUITY PRODUCTS.
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
NEWPORT TIGER CUB FUND CLASS A, B, C, AND Z SHARES SEMIANNUAL REPORT
STEIN ROE SMALL CAP ASIAN TIGER FUND
ADVISED BY NEWPORT FUND MANAGEMENT, INC.
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PERMIT NO. 20
Liberty Funds Distributor, Inc 2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
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735-08/674A-0300 (4/00) 00/542
